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After the first year of IFRS 9 — Analysis of the initial impact on the large UK banks

Published on: 30 Jul 2019

IFRS 9 has resulted in an increase in provisioning levels but not significantly impacted financial results and regulatory capital resources. However, the longer term consequences of banks implementing differing IFRS 9 impairment provision modelling judgements are not yet known.

In this report we discuss the key themes that have emerged in the UK banking industry since the end of the first full reporting period under IFRS 9.

To do this we have analysed the impact of IFRS 9 on the financial results and regulatory capital resources of the 6 largest UK banking groups, namely Barclays, HSBC, RBS, LBG, SCB and Santander UK, since transition in early 2018. We then explore the different IFRS 9 impairment provision modelling judgments made by the banks that could result in varying outcomes during future periods of stress.

Approaching this topic from an external perspective, the report also highlights some of the initial challenges experienced by the investor community in coming to terms with the new disclosures required by IFRS 9.

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